They also subsidize agriculture, energy, automotive, aeronautics, pretty much everything having to do with military technology, railways, etc. etc. etc.

My point being, have all those sectors crashed? No. Did any of them have a massive, bogus derivatives market riding their backs while placing bets on their every transaction? No.

1. Housing is an over-inflated asset driven high by speculation and federal guarantees, hence the crash.
2. Government subsidies should be eliminated from agriculture. Paying farmers not to farm in order to increase the price of grain is insane (and costly).
3. The American taxpayers purchase Defense technology from private contractors. If taxpayer funding is cut, there are layoffs (Lockheed 4,000 as we speak).
4. Education costs have been inflated through the roof with taxpayer subsidies.
5. Energy subsidies should be eliminated. In fact much of the subsidies have been to failed businesses.

I am not promoting to remove the 'safety net'. Merely remove government spending from the private sector to keep costs low (free-market principles).